"It's hard to beat asset allocation when defined across a wide
array of asset classes. It's even harder if the benchmark
re-balances the mix on a periodic basis. The historical record is
a reminder that we should think twice about second-guessing Mr.
Market's portfolio choices. This sounds like a dumb idea, until
you look at the results for a majority of 'smart' money
managers."

"Another dumb idea that ends up looking rather savvy is keeping
expenses low, which is quite easy to do with index mutual funds
and ETFs. Replicating GMI with ETFs, for instance, can be done
for less than 50 basis points, perhaps a lot less, depending on
the products you choose. Many of the active funds in the chart
above charge two to three times as much."

"The power of broad diversification across asset classes,
favoring low-cost index funds, and simple re-balancing is a
no-brainer that serves as a robust, investible benchmark. Yet
relatively few investors take full advantage of this strategy.
That's probably why GMI's competitive results persist: most
investors are doing something else. But innovation seems to come
at a steep price in relative and perhaps absolute terms."

Appaloosa
Management's David
Tepper was on CNBC Tuesday making the bullish case for
stocks. He says there is "overwhelming" evidence that the economy
is getting better.

"I'm definitely bullish. Look, ever see the movie 'My Cousin
Vinnie?' So there's this moment at the end of the movie where he
is making the case, summing it up. And he sums up so many
different things that the prosecution says, case dismissed,
because the evidence is so overwhelming. Kind of like that right
now. It's so overwhelming. The economy is getting better, autos
are better, housing is better, continues to improve except they
can't find enough people to work in housing, that's the only
thing holding it back right now.

"The Fed, well, before we get to the Fed, Australia just eased,
the ECB just eased, Korea just eased, Japan is in massive easing
mode, and these United States of America, we just are just amazed
at the way these numbers work as we go out further. … Guys that
are short, they better have a shovel to get themselves out of the
grave that they're in."

Many investors are worried about outliving their savings. At the
Investment News Retirement Income Summit in Chicago, Wade Pfau,
National Graduate Institute for Policy Studies, discussed
"whether it is better to base a retirement income withdrawal rate
on predictable historical returns or one that focuses on basic
retirement needs," according to Investment News. In choosing a
strategy to determine the rate, investors should basically
realize that it is a choice between the likelihood of failure or
"probability based approach," or the scale of failure in the
"safety-risk approach." And Pfau doesn't think one method is
necessarily better than the other.

A string of
less than impressive data out of China has raised concerns
about Chinese economic growth. A new Bank of America fund manager
survey shows that one in four investors thinks a Chinese hard
landing is the biggest tail risk. And it is second only to
Europe's sovereign debt crisis.

Retail banks entering into the wealth management business can do
so quickly if they can incorporate technological advances. This
is because there is a growing class of middle-income investors
that can't attract private banks. But retail banks are operating
in an extremely competitive environment and to attract new
customers they often have to poach them. "This is all about
stealing share now. It's not about telling people to bring money
from your mattress," Wayne Cutler of Novantas told Financial
Planning.